Sri Lanka signed a USD $ 1 billion credit line with India last week, for the supply of essential goods to alleviate the shortages of fuel, food and medicine.
Following discussions with the Sri Lankan Minister of Finance Basil Rajapaksa, India's Ministry of Finance announced that an agreement was signed between the state bank of India (SBI) and the Government of Sri Lankan for a USD $1 billion credit facility. The credit line is set to be used for the purchase of food, medicine and other essential items.
Sri Lanka is currently facing acutes shortages of a number of essential goods. Foreign reserves in the country have dropped to record lows, limiting the imports of essential goods as vendors are unable to purchase goods with US dollars. The country is also facing a debt crisis with upwards of USD $7 billion due in debt repayments this year. The crisis is also made worse through government mismanagement which has led to record levels of inflation driving up the costs of everyday items.
Neighborhood first. India stands with Sri Lanka.
— Dr. S. Jaishankar (@DrSJaishankar) March 17, 2022
US$ 1 billion credit line signed for supply of essential commodities.
Key element of the package of support extended by India. pic.twitter.com/Fbzu5WFE3n
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